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EDF also plans another two-reactor
power station to replace Sizewell A, in Suffolk. It has invested
£1 billion in preparatory work and is keen to make a decision on further
investment in the £10 billion project by the year’s end.

The talks with the Chinese are being
closely monitored by the Prime Minister and Chancellor, who have visited
China and are keen to tap into Beijing’s financial and nuclear
experience.

With the spectre of power cuts
hitting Britain by 2015 as dirty coal-fired power stations and old
nuclear plants are taken out of commission, any moves to increase
security of supply will be welcomed by the Government.John Hayes, the new pro-nuclear Energy Minister, has been to China twice and is in close touch with the delicate negotiations.

A big Chinese investment in Britain’s
nuclear programme could not have come at a better time for the
Coalition. Last week’s decision by French energy giant Areva and China’s
Guangdong Nuclear Power Group to pull out of a bid to build power
stations at Wylfa on Anglesey and Oldbury, Gloucestershire, suggested
the Chinese might have lost interest in investing in Britain.

But senior Whitehall sources are
confident Beijing remains committed to investing here and are optimistic
that a decision will be made shortly.

A spokesman for EDF said: ‘We said
that we were open to the idea of other partners investing in the
project. As we approach our final investment decision, it is right to
consider funding options, including seeking additional partners.

'The project is advancing well and
has achieved a level of maturity to make it attractive. It is too early
to say anything about the outcome.’

Key to attracting overseas investment
in the nuclear industry is the reform of the electricity market and
Hayes is playing a key role in ensuring that that there are enough
long-term incentives to get the investment without giving nuclear
developers a green light to make huge profits.

He told Financial Mail that he had ordered his officials to ensure the public interest was protected.